Harjit Singh vs. Birendra Pal Singh

Held

The Court held that the learned Civil Judge did not err in appointing a receiver. The Court found that it is an admitted position that the appellant and respondent are brothers. While the appellant argued he paid the entire consideration, the sale deeds show the property was purchased by both brothers, and the loan was sanctioned in the names of both. Prima facie, the loan was taken by both brothers, and the plaintiff's son was also a co-borrower. The Court noted that the impugned order did not restrain the appellant from running the business but directed him to maintain proper accounts, preserve records, and not create third-party interest. The receiver's role was limited to supervision and reporting on the property's condition, business operations, account maintenance, and income generation. The Court found no illegality in the impugned order, as the conditions for appointing a receiver, as argued by the appellant, were met. The Court found that the learned court rightly passed the order merely appointing the receiver and seeking a report to ensure proper maintenance of income and expenditure, preservation of GST records, and other business records.

Facts

The appellant, Harjit Singh, is appealing an order dated May 22, 2026, passed by the Civil Judge (Senior Division XV), Ranchi, which allowed the respondent's (Birendra Pal Singh) application for the appointment of a receiver. The respondent, who is the appellant's brother, filed a suit for partition of property and a multi-storied commercial building thereon. The appellant claims he purchased the land, paid the entire consideration, and developed the property at his own cost, operating a proprietorship business, M/s Hotel Swarn, as the sole proprietor. The respondent, however, contends that the property was to be jointly developed for a hotel business and that the joint hotel business is his sole source of livelihood. The dispute also involves a loan taken for the property's development, with both brothers listed as co-borrowers.

Key Issues

1. Whether the learned Civil Judge erred in appointing a receiver for the suit property and the business thereon, considering the principles laid down in Order XL Rule 1 of the Code of Civil Procedure, 1908, which requires the plaintiff to demonstrate a chance of success and potential damage or emergency? (Petitioner's contention). The petitioner argued that a receiver should not be appointed if it deprives the defendant of de-facto possession and that the learned court failed to appreciate this aspect. 2. Whether the learned Civil Judge rightly passed the order appointing a receiver and seeking a report, considering the prima facie evidence presented regarding the joint nature of the property and the loan taken by both brothers? (Respondent's contention). The respondent highlighted that the plaint itself stated a mutual decision for joint development and that loan documents show both brothers as co-borrowers, justifying the receiver's appointment for management, protection, and preservation of the business and its accounts.